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09-13-2012, 12:55 PM
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Long post/proposal to follow. Right now we're at:

Year 1 - 49%
Year 2 - 48%
Years 3-6 - 47%

Average: 47.5% over 6 years

Year 1 - 54.3%
Year 2 - 52.7%
Year 3 - 52.2%
Year 4 - 52.3%
Year 5 - 52.4%

Average: 52.7% over 5 years

Is there a deal to be made? I think/hope so...

Take the middle ground between the two averages (47.5% and 52.7%) = 50.1% (surprise surprise, is this where both parties are willing to end up?).

So we need to accomplish two things: Get the average share for players to about 50.1%. We also want to give the players some amount of growth in revenue to make them happy, so lets go with 4%, the average of the first 3 years that they offered in their agreement.

For next season, assuming league revenues rise by the 7.1% average, they would be around $3.53 billion. Increasing player revenues by 4% gives them $1.98 billion, which is 56.0% of $3.53 billion.

If you are still with me, lets project this calculation over 6 years, assuming growth of NHL revenues at 7.1%, giving the players a 4% increase in salaries.

(Year; NHL revenues; Player Salaries ($); Players Salaries (%)
Year 1: $3.53B; $1.98B; 56.0%
Year 2: $3.79B; $2.06B; 54.4%
Year 3: $4.05B; $2.14B; 52.8%
Year 4: $4.34B; $2.22B; 51.2%
Year 5: $4.65B; $2.31B; 49.7%
Year 6: $4.98B; $2.40B; 48.2%

What is the average of these percentages? 52.1%, which is about 2% higher than the suggested average of 50.1%. This means we'll have to reduce each year by 2%. Since the average amount the players have lost to escrow over the six years of the current CBA is approximately 2.5% (according to McKenzie), this hit shouldn't be too bad:


Now the only problem is that endpoint of 46.2%, probably less than what the NHLPA would like. The respective endpoints of NHL (47%) and NHLPA (52.4%) average out to 49.7%, which is 3.5% higher than 46.2%, so lets take that from the first five years in a staggered amount:

Y1: 52.5% (-1.5%)
Y2: 51.4% (-1%)
Y3: 50.3% (-0.5%)
Y4: 48.7% (-0.5%)
Y5: 47.7% (+/- 0%)
Y6: 49.7% (+3.5%)


At year 6, assuming the 7.1% compound growth of league revenues to $4.98B, the players share will be $2.48B, 30.5% higher over than it was this past year, nice increase in salary for the players. For the owners, they will get their 50.3% share of revenues by the end of year 6, which is where they seem to want to end up, and won't have an immediate increase in player costs.

Cap estimate next year would be $70.3M x (52.5%/57%) = $64.7M, which only 6 teams are currently over, so include some sort of buyout opportunity.

Both sides give up some $$$ from their current offers, but they will not collectively lose any revenues due to lost games played during the season.

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